Tidal launches ‘Fan-Centred Royalties’ for Artists
Happy Friday everyone!
A few months back, we dug deep into exploring the rationale behind $100 Billion worth FinTech giant Square’s acquisition of Tidal- the music streaming app bought by Jay Z in 2015.
Back then, Jay Z and Jack Dorsey- Founder & CEO of Square, discussed on a Twitter Spaces conversation at length about the vision of Tidal and how they plan to put artists at the centre of the ecosystem, and let fans support them directly.
Well, that seems to be materialising fairly quickly, as Tidal announced a new equitable model for royalty payouts to artists on its platform 💸
How does it really work?
To understand why Tidal’s royalty model is different, it’ll be a good idea to understand how traditional streaming platforms such as Spotify calculate royalties.
Here’s a simplified video which breaks it down 👇🏻
So what exactly is Tidal changing?
For starters, there are three different tiers of plans being announced, with a much anticipated free-version of the streaming app ⏬
Apparently instead of renting out the interruptions in the free version for external brands to advertise, Tidal plans to use it for their own benefit in some manner, but the specifics remain to be seen.
However, the big announcement in the entire launch is the way royalties per stream will be calculated, and how it’s different from the current standard 👇🏻
Instead of dividing the streams of an artist based on everyone’s listening, Tidal shift’s the model to a more 1-on-1 basis, wherein fans get to support artists that they stream and like, directly.
Not just that, Tidal is introducing another income stream called ‘ Direct Artist Payouts’, which channels 10% of the subscription fee paid by a user to their top-streamed artist of that particular month ⏯
Basically, if an upcoming Indie artist you’ve recently discovered is suddenly your top streamed artist for a month, they’ll get 10% of your subscription fee.
How cool is that? 🤯
While this particular feature is only applicable for the highest slab of $20/month, as Dave Edwards from Audiomack pointed out on Twitter, it’ll be interesting to see how many users actually shell out for the HiFi Plus version
I think that the point is pretty valid, everyone ‘wants’ to support artists and Tidal has opened up an interesting experiment to see if fans take the plunge into their premium version.
Our take on this?
Jack Dorsey is a one-of-a kind entrepreneur.
With Twitter and Square, he has already founded one of the largest social networking platforms in the world, and democratised Financial Services & Commerce for Small Businesses around America 🇺🇸
So when Square acquired Tidal earlier this year, there were multiple heads left scratching figuring out the synergy between the two companies 🤔
However, if viewed from a zoomed out lens, Square and especially their consumer product- Cash App, is more of a cultural phenomena than just payments 💰
Strong network effects of merchants & consumers, coupled with references in Hip-Hop songs and a relentless focus on Crypto, position it to be much more than just financial services.
So far, Tidal has been serving a niche market in streaming, catering only to the premium segment of HiFi audio and being available in just 61 countries as opposed to Spotify’s presence in 180+ countries worldwide 🌎
Now that it’s under Square’s control, Tidal could very well aim at global expansion and their vision to put artists at the centre of it all, starting with the new rollouts announced this week, makes things very interesting.
The Streaming Wars just had another hat thrown into the ring 😉
Have a good weekend everyone 🍻
Originally published at https://incentify.substack.com on November 19, 2021.
